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|Subject: Europe: Scramble on to rescue big banks||Date: 10/5/2008 11:20 AM|
|Author: goldcountry||Number: 257728 of 467436|
Bailout European Style;
Europe: Scramble on to rescue big banks
Germany's Finance Ministry convenes crisis talks after bank bailout deal fails
Hypo Real Estate Holding AG is the country's No. 2 commercial property lender
Government, which planned to inject nearly $37.4 billion, may need to spend more
Belgium government battles to save Fortis, Iceland considers urgent action
STOCKHOLM, Sweden (AP) -- Governments across Europe scrambled to save failing banks on Sunday, working largely on their own a day after leaders of the continent's four biggest economies called for tighter regulation and coordinated response to the global meltdown.
In Berlin, the German government held crisis talks after the collapse of a $48.4 billion bailout of Hypo Real Estate AG, the country's second biggest property lender.
German Chancellor Angela Merkel said that Europe's biggest economy would "not allow the distress of one financial institution to distress the entire system."
The country's finance minister later said it would guarantee all private savings accounts.
In Iceland -- particularly hard-hit by the credit crunch -- government officials and banking chiefs were discussing a possible rescue plan for the country's overstretched commercial banks.
Belgian Prime Minister Yves Leterme said he aimed to find a new owner for troubled bank Fortis NV to restore confidence in the company before the opening of markets on Monday. Will the U.S. bailout work?
The bank's Dutch operations were nationalized amid fears they could go insolvent.
British treasury chief Alistair Darling said that he was ready to take "pretty big steps that we wouldn't take in ordinary times" to help the country in weather the credit crunch.
Darling told the BBC that the government, which has provided billions of pounds (dollars) in support to the banking sector, that it was "important to take generalized action as well as being ready to take particular action if you get a particular problem with an individual bank."
In the past year the British government has acted to nationalize struggling mortgage lenders Northern Rock and Bradford & Bingley.
On Saturday, the leaders of Germany, France, Britain and Italy met to discuss the growing meltdown which has leapfrogged across the Atlantic from the U.S. to Europe, but shied away from the massive $700 billion bailout passed by the U.S. Congress a day earlier that President Bush signed into law.
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